good evening. i'm wolf blitzer in washington. an historic evening in the nation's capital. in only four hours, the united states will go over the fiscal cliff. >> i'm ali velshi in new york. as the clock strikes midnight, the ball drops and the confetti falls, this country will be facing a dangerous combination of tax hikes for all americans and across the board spending cuts. >> but there is a deal in sight. democratic and republican sources insisting the senate hopes to vote on a final bill before midnight tonight. here's what some of the plan will likely look like. among other things, an increase in the tax rates for families making over $450,000 a year. extending unemployment benefits. and an increase in the estate tax rate, but the house of

representatives has already gone home. and that means regardless of what the senate does, we will technically go over the fiscal cliff at midnight eastern time. let's get straight to our senior congressional correspondent, dana bash. she's following all of this. what's the very latest? >> it may look like there's a lot of action going on here in the halls of congress, but they're all people like you and me. they're all reporters waiting, waiting for something to happen, waiting for some kind of news, waiting for an announcement of some sort, preferably for everybody's sake, a deal that can be done in short order. we reported in the last hour that democratic leadership source told me the goal is tonight, but tonight is almost over at this point. it's just a few hours away from the deadline, december 31st deadline. it's becoming increasingly harder to see an actual vote in the senate tonight. what could be happening and what could happen ultimately is

democratic and republican leaders can come out and say they have the parameters of the deal, they have all of the details of the legislation, but perhaps let senators go home, read it, digest it, and come back and vote on it tomorrow. we don't know if that's going to happen yet. it's still very much up in the air, but the fact it is 8:00 eastern, and we haven't heard any word of a deal is certainly not a good sign for that. one other thing i wanted to point out is down this hall behind this wall is where democrats usually meet to caucus. we understand from our jessica yellin that joe biden, the vice president, who of course is a former member of that caucus, is supposed to come up to capitol hill to talk to his caucus because he was the point person to negotiate the deal. we're waiting to see if that is going to happen. part of the issue is there are some democrats who are skittish, to say the least, about some parts of this bill. >> if it does pass the senate and we assume if there's an

agreement, it will pass the senate with bipartisan majority of the vote. is it clear to you, dana, that it will definitely pass the house of representatives? >> i would never say definitely when it comes to anything on capitol hill, particularly given what we have seen over the past week when it comes to the house of representatives. however, talking to republican leadership sources in the house over the past 24 to 48 hours, they feel confident that as you said, if, capital i, capital f, if something happens in the senate with a bipartisan vote, it would be pretty hard for house republicans and democrats not to come together in some way, shape, or form and approve it and send it to the president. >> lots of work still to be done. dana, thanks very much. ali, it's never done until, as they say, it's done. >> no, and we don't know where it's going to be. let's take you to the other end of pennsylvania avenue where jessica yellin is standing by.

the white house is very involved in this, particularly joe biden. dana saying if there is a deal, they're going to need joe biden to go over and talk to democrats there to sell this to them. there have been those who have been dissatisfied with the development of a deal as we have heard about it today. what's going on at the white house right now? >> well, i have reported that the vice president is set to go up there just as soon as the democrats hold or schedule a caucus, a meeting of the senate democrats to present the bill. and then the vice president will take their questions and answer any of their concerns. but ali, just hours before that ball is set to drop in new york city, there is still time for lawmakers to drop the ball here in washington, d.c. i have been waiting a long time to use that line. >> you may have several chances through the course of the evening to use it more. >> can i give you -- let me tell you something else. there is still -- the important thing for the white house right

now is there's a lot of optimism here, optimism among the republicans, but there's still time for this to fall apart. a number of progressive groups are coming out against the proposal, not just the progressive change committee which is an organization of progressive groups. they said democrats hold the cards and our leverage increases in less than 12 hours if we hold strong in opposition. the head of the labor organization tweeted saying it's not a good deal if it gives more tax cuts to the 2% and sets the stage for more hostage taking. the head of that organization is not saying that he is trying to tank the deal, but an official with the group says we are throwing cold water on the kind of drift that we felt in it this afternoon. >> kind of drift. all right, so there is pressure. there are potential problems. we'll stay close to you on this and get you back on as soon as you have further developments. wolf, what jessica is saying speaks to what you brought up

several hours ago. the longer it takes to get done, the more possibilities of it coming undone. >> that's been my experience in washington. if you're close to a deal, wrap it up quickly otherwise there's plenty of opportunity to unwrap it. >> joining us now is republican congressman tim kuehl staff of kansas who has been watching all this very, very closely. if it passes, congressman, the senate tonight or tomorrow morning, comes up for a vote in the house of representatives, are you going to vote in favor of it or against it? >> we're still awaiting the details. i think it's important to read it before i make a decision, but near as we can tell, it increases taxes on certain americans and it would probably increase spending as well. and there might be a debt ceiling part of that as well, i'm not for certain, and it doesn't do anything about entitlement reform, which is the problem. i think it would probably be the

typical washington deal, but i can't vote for something that isn't a solution. on all fronts, i do believe it's going to cost american jobs. it's going to put people out of work with the 2% that are going to pay higher taxes. we believe that will impact maybe a million small businesses and raise their taxes. and don't forget, tomorrow, the bulk of the obama care taxes kicks in. that's a trillion dollar in taxes over the next year. there's a lot of things coming tomorrow, including the debt ceiling we're going to crash through that are not good for america. >> does it make any difference for you, congressman, that grover norquist told me about an hour ago, if he were a senator or a member of the house, he would vote in favor of this deal because it does not formally result in tax increases. it results in making permanent the tax cuts from the bush administration 2001-2003. >> it doesn't make them all permanent, just part of those. again, it's the million small businesses that are going to be impacted. they're going to pay more in

taxes. they're not going to hire people because you raise their taxes. i have to worry about them. in my district, in kansas, it's small businesses. >> that's only small businesses that make more than $450,000 a year. >> yeah, that's just a million of them. just 1 million of them. i thought washington could come together on one thing and do what we can do to create jobs. i don't know how raising taxes or increasing spending, which is what they're talking about as well -- >> do you want 98% of american families to see their taxes go up? >> no, absolutely not. i don't want anybody to pay more. >> that's what will happen if you vote against it. >> if it passes the senate, but i don't know if the president is onboard yet, based on his press conference today, i don't think he was very helpful to the process, but i don't think any american should pay higher taxes. what we need to do is create job said and grow the economy, and we do that by giving some taxpayers certainty, but i agree with the tax cliff, if nothing gets done, taxes are going to go

up. note, the treasury department did push back on new withholding tables. they're not going to take more money out of your check starting tomorrow, but they could do it later tomorrow. we'll see if the senate gets something done tonight. >> ali velshi in new york. i want to ask you a question about the taxes you keep referring to on small businesses. i have done a lot of research on this. you're saying the number of businesses that would have more than $po450,000 in cleared inco after their expenses and all of those things that file as corporations would number a million? i don't, a, believe that number to be true, and number two, the vast mujoerajority of those businesses are in fact not job creators. you understand that to be the case? most of those are sole proprietorships, small operations that don't actually employ anybody. >> i have seen research when we were stotalking about the millionaire threshold, that would impact 41% of business income. >> that's a very, very different

and somewhat misleading statistic. 41% of business income is not 41% of businesses. you understand the distinction, right? >> absolutely. >> so it doesn't have anything to do with job creation. i wanted to be clear. i'm not suggesting -- hold on. >> you asked me -- >> let me ask the question, sir. you put out something -- sir, you put out information to our viewers, you're on cnn right now. i would like the information to be accurate. you're saying more than a million businesses will be affected if the threshold is $450,000. you want to stick with that information or do you want to check that? >> that's our best guess. we're still working on that. >> i think that's a guess. >> can i answer the question? >> go ahead. >> we have numbers from montana state university. i believe the source, that say at the million level, you impact 311,000 small businesses impacted by the tax increase. at the $250,000 level, it's over 2 million small busisses. >> when you say impact, when

taxes go up, everybody gets impacted, right? you started the conversation with wolf by saying it's going to cost jobs. give me the relationship between the two. >> you understand. if you raise taxes, you can't hire more people. if you're paying more to washington, you don't hire more employees. it's the other way around. >> what i'm saying is most of the businesses you're talking about don't actually hire extra employees. >> they actually do. it's called small businesses -- >> i'm going to look up the research from montana state university. i have never seen that research before. i'll check that out and tell our viewers what the case is. >> absolutely. and visit with our office. we'll be happy to provide you what we have. it's difficult to get stuff out of the administration to tell us who is impacted by a $450,000 level. >> we don't have difficulty getting that information. we have broadcast it on cnn. >> we don't get anything out of the administration. i would be happy if they would -- >> we don't need it from the administration. that's public, but we'll get it. >> bottom line, gricongressman,

you're going to vote against this legislation assuming it passes the senate? >> assuming that's what's in it. until they put something down on paper, washington is all about rumors, all about what they're going to do. senate hasn't passed a budget in 1,341 days. i'm not going to guess they're going to pass this yet tonight. we'll see if they do, if the senators get something done, we'll see what happens. but as i see it now, it raises ta taxes, increases spending, and does nothing for entitlements. it's three strikes in my book, and you're out. my constituents are clear they want progress on spending, reducing spending, not increasing spending. yeah, i would be voting no. >> congressman, we'll check your numbers. ali is getting ready. he has a team doing some checking, i assume right now, and will report to our viewers what we learn. appreciate your coming in. >> thank you. still to come, is the current deal in the works better than no deal at all. our economic expert is standing by to join us. and hillary clinton's doctor

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crucial vote in the senate on a deal to avoid going over the fiscal cliff. cnn has learned that a vote will likely happen tonight before midnight. the house will not vote, however, until tomorrow. here's what we know about the deal on the table right now. it includes an increase in tax rates for families making over $450,000 a year. individuals making over $400,000 a year. it will extend the unemployment benefits that ended on december 29th and it will include an increase in the estate deal -- in the estate tax. is this deal better than no deal? joining me now is the former director of the congressional budget office, and former labor secretary robert reich, author of "beyond outrage, what has gone wrong with our economy and our democracy and how to fix it" among many other books. thank you for joining us. >> certainly. >> bob, i want to ask you because i heard you talking to wolf and i was amazed.

you were in a conversation with wolf, with grover norquist. grover norquist said he would probably support this deal, giving cover to rop republicans who said they would never vote for a tax increase. you have shared your opinion that you would never vote for this deal. as you know more about it, do you maintain that you still would not support this deal? >> i think the administration, ali, can do far better. we're basically over the fiscal cliff tomorrow. the administration and democrats can provide basically a middle class tax cut, introduce legislation providing tax cuts and restoring spending cuts and republicans would be hard pressed not to vote for it. remember, also, there will be more democrats in congress. >> i'm going to ask you this, then, one of your complaints was by raising the threshold to $450,000 for couples, $400,000 for individuals, you go from raising $800 billion to about

$500 billion, which you don't think is sufficient nlt. but if you're not prepared to see taxes raised on the middle class, you want this threshold to be lower, and you're not really that interested in entitlement cuts, you made that pretty clear, where actually do you deal with curtailing the growth in the deficit and the debt? >> i go first of all to military defense cuts. we have a bloated military. our military right now, our military spending is larger than the next 13 military budgets, the next 13 nations put together. i would also go after corporate welfare. all of the spending for farm price supports, agricultural subsidies, also for big drug companies, for insurance companies. we have a huge amount of corporate welfare in that budget. and there are other places you can cut as well. this is not a matter of democrats not wanting to cut. i think it's just a matter of differences between democrats and republicans and what they want to cut. >> doug, i want to ask you something.

i don't know if you heard the conversation we had with the congressman. like a lot of americans, i'm getting frustrated with americans making up statistics and making up facts. if you raise taxes on people earning more than $450,000 a year, you actually don't do any substantial damage, possibly no damage at all to the economy, would you agree? >> i would never say no damage. but we'll see. i think the important thing is that this deal, however imperfect, and i genuinely hope that everyone voting tonight says i can find something wrong with this, but this is way better than going over the fiscal cliff. to literally have this deal unravel would be to invite the equity markets undo the rally they had today in shock and dismay. international investors question our ability to govern the united states, to damage consumer confidence. regardless what people may think about retroactively changing the tax code or the sequester, you

don't undo those kinds of shock. it's incredibly unwise to risk that. >> is this number okay? you okay with the number if it's $450,000? maybe they'll come back with $500,000? >> there are two different problems. one is avoiding self-inflicted recession. the second is dealing with our national debt. none of the numbers are sufficient to deal with the latter. that has to be a spending discussion. in terms of which numbers we get tonight, it's about getting the vote. get me a number that gets me yes, and that's the right number. >> and bob reich, i remember you telling me a few weeks ago, we had a good conversation because i argued that tax rate should go up for everybody if you really want to settle this whole thing. it's not a personal opinion, i was just putting it forward mathematically. your response is this debt and deficit stuff is a bugaboo. do you believe that? >> we do have a real problem in the out years with health care expenditures. that's really the centerpiece of our deficit and debt challenge. but in the short term that is

over the next year or two, i don't think we ought to be tackling the budget deficit. we have huge unemployment, a lot of underutilized capacity in this country. it's exactly the wrong time to embrace austerity economics. ali, if i can just make one more point. that is one thing that really worries me about this current agreement as it is being structured is it doesn't deal with the debt ceiling. there is no agreement on the debt ceiling, which means you're going to have beginning next week or even sooner, republicans and democrats engaged in the same sort of trench warfare we've had for years over raising the dents. and that debt ceiling. without an agreement, we're back to square zero. >> we agree on that point. great to see you both. thanks for staying up with us and happy new year to both of you. hope we don't have to talk again tonight. >> one of the main stumbling blocks in the fiscal cliff negotiations was that no-tax

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all around the world, we want to welcome our viewers from

all around the world. the new year is being celebrated with spectacular displayed of fireworks. australia kicked off 2013 with its annual show in sydney harbor. the celebration continues to make its way around the globe from hong kong to dubai. to london, and we're just about 3:30 away from ringing in the new year on the east coast of the united states. cnn's isha sesay is in the middle of the action in new york city's times square. what's it like there, isha? >> only one word. it is fabulous in times square. say hi to wolf, everyone. happy new year, wolf. there is a great atmosphere here, wolf. about a million people expected to fill up times square for all of the festivities, a great musical act, and seeing the ball drop at midnight. alongside 2,000 pounds of confetti that will rain down here on times square.

i want to quickly introduce you to someone from australia who had been dreaming about being here in times square for a long time. how is it? describe for our viewers what it's like to be here. >> it's so amazing and surreal. everyone is great. and the atmosphere is amazing. >> okay. she summed it up best. the atmosphere is amazing. the party is in full swing. keep checking in with us. we'll keep you posted on the party here in times square, and it's also cold. happy new year, wolf. >> happy new year, isha. happy new year to our friends in times square. a million of them will be watching and coming back to you. also still to come here in our special coverage, a major stumbling block emerging in the fiscal cliff negotiations. that stumbling block has been the no-tax pledge many republicans signed when they took office. grover norquist is the man

behind the pledge. he's here live. and the latest in hillary clinton's condition. doctors have discovered a blood clot between her brain and skull. [ coughs ] [ baby crying ] ♪ [ male announcer ] robitussin® liquid formula soothes your throat on contact and the active ingredient relieves your cough. robitussin®. don't suffer the coughequences™. and the active ingredient relieves your cough. ...so as you can see, geico's customer satisfaction is at 97%. mmmm tasty. and cut! very good. people are always asking me how we make these geico adverts. so we're taking you behind the scenes. this coffee cup, for example, is computer animated. it's not real. geico's customer satisfaction is quite real though. this computer-animated coffee tastes dreadful. geico. 15 minutes could save you 15 % or more on car insurance. someone get me a latte will ya, please?

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we have new details tonight about secretary of state hillary clinton who remains in a new york city hospital with a potentially dangerous blood clot

between her skull and her brain. doctors discovered the clot behind her right ear in a follow-up mri yesterday. jill doherty is with us, also with us, dr. sanjay gupta. jill, first to you, what is the latest on the secretary of state's condition? >> the doctors, and those are her two personal doctors, are saying, i guess let's give you the good news, there was no stroke, no neurological damage. and this blood clot that they're trying to shrink, they're using this medication, obviously, blood thinners to try to give it to her, shrink it, but they do say she'll be released once they decide how much of that medication she needs. and the final thing is she is talking. she's talking to doctors, family and friends and every other aspect, they say she's doing quite well and they expect a full recovery. >> we hope there will be a full recovery. we wish her only the best. jill, stand by. i want to bring in our chief

medical correspondent dr. sanjay gupta to help us better appreciate her medical condition. give us a little perspective. >> it's interesting, following this from the very beginning. she had this concussion a few weeks ago that was due to a fainting episode. then they said yesterday there was a blood clot treated with blood thinners. i want to show you the model here, an important point here as we take a look at this. we talk about a blood clot. if it's a blood clot that's actually pushing on the brain, that obviously can be a great concern and is not something you would typically treat with blood thinners on anti-coagulant because that could make the bleeding worse and put more pressure on the brain. what we know is the blood clot is inside one of the veins, one of the veins around the brain here. take a look, let me remove this part. in the secretary's case, it's on the right side of her head. for the purposes of this example, this model, i'll show you the left side. see the blue area in here? that's one of the veins that drains blood away from the

brain, and in her case, one of those blood vessels right in here has a clot in it, and as jill was saying, that's what's being treated with these blood thinners, with these anticoagulants, to try to break up the clot and allow the blood to move more freely through that area. >> i assume she had some symptoms, something caused her to go in on a sunday and get an mri. that's not normal, is it? >> it's not normal, and my guess is she's probably been feeling pretty crummy since the concussion. you know, she had a stomach virus before that. it's a lilt -- i agree with you, wolf. on sunday to get an mri scan and get it checked out, there were probably some symptoms or some concern that led to that. of course, she is hillary clinton as well. so people will do things for the secretary of state maybe to try to make scheduling easier. we just don't know, but i think there was some reason to look for this blood clot. this is a rare thing that we're describing. it doesn't happen very often that you get a blood clot inside

one of these veins around the brain. in this case, obviously, it's there. >> i know if you take blood thinners, even if you take aspirin, and you get a cut, you're bleeding for a while. what are the side effects from the medications we assume she's taking now. >> that's a good point. with these blood thinners, what they're doing in the hospital right now, they're trying to get the dose exactly right. you don't want to give too much because it can cause bleeding complications. simple fall or cutting yourself shaving or something like that, you can actually get a lot of bleeding if you have a lot of this blood thinning medication in your system. on the other hand, inyou don't give enough, it's not really doing the job, which is to help break up this clot. yeah, these medications do carry their share of risks, the most important is if you injure yourself, you're likely to have more bleeding than you otherwise would. >> my old friend, david bloom, the late nbc reporter who had

deep vein thrombosis in the 2003 war in iraq. that was fatal. this is a serious issue we're dealing with, these blood clots. >> anytime you have a blood clot inside the blood vessel, we have to take this very seriously. i remember, i was in iraq when this happened with david bloom and in his case, dvt, deep veins thrombosis. it broke off and traveled to his lungs, causing a pulmonary embolism. the larger concern here is if you can't get the blood out of the brain, the brain will start to slowly swell. that increases pressure. that's why you want to make sure you're getting not only enough blood to the brain to supply it with oxygenating blood, and also making sure you can drain the blood as well. hopefully when they break up this clot or allow it to dizv dissolve, that won't be an issue for her.

>> let's hope and pray she has a full recovery. we wish her only the best. thank you, sanjay. and ali, i know you wish her the best. >> wolf, i have been doing research, as i promised i would do, into the conversation we had with congressman huelskamp. we're working our way through that study. i'll tell you the facts we have right now. if everybody who earned more than $250,000 saw an increase in the top tax rate from 36% to 39.6%, that would be 3.5% of all small businesses. that would be 940,000 businesses. that's, i think, the number the congressman was quoting. at 450,000, it's nowhere near the number that the congressman was quoting. but let's be generous and say it was that. of that number, only a very small proportion are not hedge funds, partnerships, law firms, companies that don't employ a

whole lot of other people. so the congressman's facts are just incorrect on this. there is nowhere near a million businesses that will be affected by this tax increase on people who make above $450,000. we're waiting on a vote on the fiscal cliff deal as early as tonight. >> i can report we have reached an agreement on all of the tax -- the tax issues. >> tax issues include, as i mentioned, raising rates on individuals earning more than 4 $400,000 or households earning over $450,000. now, by my read, wolf, that goes directly against the pledge that most republicans and some democrats signed when they took office to never vote to increase taxes under any circumstances. the man behind that pledge, grover norquist, the president of americans for tax reform, is with us now. grover, we spoke this morning, but you spoke to wolf probably two hours ago. and i had to rewind it and watch it again because you told wolf

that your reading of the proposal that we think is going to be presented to the senate in a little while is okay with you. you don't think it breaks your pledge. how is that possible? >> well, tomorrow this next week, taxes go up by about $500 billion on the american people if nothing is done. what the republicans have done in this negotiation and what speaker boehner was looking to do as well was to take off the table as much of the tax increase that obama could impose on the american people simply by not passing this legislation, taking that off the table. the republicans in no way have said that they're happy with the higher rates that obama's pushing for on small businesses and a lot of individual americans. so we can come back and relitigate the other down the road, but right now, we've made permanent a set of tax cuts that

up until now were temporary. remember, all of the democrats, almost all of the democrats voted against the bush tax cuts to begin with. >> i get it, but that's not the pledge says. the pledge says you won't vote for tax increases. >> right, and what they're voting for is to continue lower tax rates. they're not -- if nothing happens, taxes go up $500 billion. >> okay. >> it's not as if nothing happens, taxes wouldn't go up. let's raise taxes. we're in an odd situation because -- it won't repeat because the taxes are being made permanent. the good news is we're never going to have this question raised again, these taxes are being made permanent. the alternative minimum tax, the protection against the alternative minimum tax hitting 30 million americans will also be made permanent. so there's a lot of good stuff that's being done. is it everything the taxpayers want? no. we should do what obama did two

years ago. extend all of the tax cuts for everybody. >> all right, if republicans and like i said, some democrats who have signed your pledge, are watching you right now, for the moment, knowing what you know, you're giving them cover to go ahead and vote thumbs up for this deal? >> yeah, and as you know, ali, this pledge is to the people and their state. they need to be able to look the people in their state in the eye and say, here's what i voted for. here's what's in the bill. and if there are any surprises, they don't and to me about that. they talk to the people in the state. >> but the average voter in kansas doesn't have the several millions of dollars you have in the bank to draw people's attention to the breaking of the pledge. in other words, grover norquist carries more weight than the average voter does if a pledge is broken. >> and when george herbert walker bush broke his pledge in 1990, it was the clinton campaign that spend a lot of money running very effective ads about him breaking the pledge.

luckily, i don't have to spend the money to talk about who is breaking the pledge. >> now we have it clear you give your blessing to it. you gave your blessing to plan b last wieeek. there are probably about 50 republicans in the house who actually think their pledge to their constituents is more important or their idealogical position. we heard from rand paul today, is more important than this. there's some chance this doesn't pass. do you believe the damage raising taxes on people who make more than $450,000 is greater than the damage done if we go over the fiscal cliff? >> the question is if you go over the fiscal cliff and have to renegotiate, what is the deal? this deal is better than what would happen if nothing passed. and because this is separating out the spending issue from the tax issue, i think it's very helpful. we have a lot of problems on the spending side. congress, the president, have

not reduced spending, stopped the growth of spending as we need. we need to focus on that by taking the tax issue off the table. i think they'll have a lot more clarity on the tax issue moving forward. at the state level in the 50 states, where we have governors who have taken the pledge never to raise taxes, they have a lot more success in reining in spending because they take the tax issue off the table and it doesn't confuse the issue. >> doesn't dominate the discussion, which is what happened here. it dominated the discussion where the spending side of things, we don't find ourselves in agreement on a lot of things, but it's much more complicated to deal with spending. your argument is if we could get our attention off that, we might be able to get progress. >> some progress, i hope. >> grover, good to see you. grover norquist. coming up, criticizing the president's handling of the fiscal cliff. his remarks that have some republicans outraged.

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♪ ♪ ♪ [ mouse clicks ] we're following breaking news. no stopping america right now from going over the fiscal cliff. tonight, the senate may vote on a plan. tonight, the democratic sources, democratic sources telling us that the vice president, joe biden, is now heading to the senate to meet with leaders there. but the house has already called it a night earlier today the president knocked republicans for dragging out these

negotiations. >> if republicans think that i will finish the job of deficit reduction through spending cuts alone, if they think that's going to be the formula for how we solve this thing, then they've got another thing coming. that's not how it's going to work. >> joining us tonight, our political analyst, roland martin, and tim carney, the senior political columnist for the "washington examiner." roland, the president was tough in his remarks earlier today. that resulted in severe criticism from republicans. listen to this. >> well, he kind of made fun, made a couple jokes, laughed about how people are going to be here for new year's. sent a message of confrontation to the republicans. that's not the way presidents should lead. >> that was pretty unusual to have a kind of pep rally in the middle of negotiations.

>> a sensitive moment in the negotiations. do they have a point, roland? >> no, they don't have a point. did they not get the memo? he beat their guy in november. we literally went through a year of campaigning with the president was perfectly clear where he stood on this issue. republicans simply want to play chicken. they thought the president was going to back down. they thought they were going to get president obama they often saw in the first term. what happened, wolf ? they got a tougher president who said try me, just try me and see what happens. >> hold on for one second because dana bash, our senior congressional correspondent is getting more information. what are you learning, dana? >> hi there, wolf. that is that senate democrats are going to meet probably in about 20, 25 minutes in the room right behind us here, and they're going to meet with a very important person, a former member of their caucus, joe biden, the vice president. he's on his way up here to talk to them about what looks like --

looks like a deal that is now -- i don't want to say done, but as close to done as it seems it is going to be before the senate democrats bless it. in fact, jessica yellin is hearing from her sources that leading into the possibility of a deal even more, they're a little more cautious here because particularly when it comes to senate democratic leaders, they're skittish about saying there's a deal before they talk to their rank and file. but it seems as though one of the issues we talked about before which had to do with the estate tax, it has been worked out. the white house has worked that out with the senate republican leader. so again, senate democrats are going to meet to discuss it in about 20, 25 minutes. we should point out, obviously, they start meeting at 9:15 eastern. that would not give them a lot of time at all to actually get a vote tonight. it's not out of the question, but it's looking a lot less

likely. what could potentially happen is they could all agree. they could formally bless it, write it up, and vote tomorrow. none of that is set in stone yet. i think we're all in a holding pattern until we see what happens with this democrat caucus. the fact that the vice president is coming up here, it certainly is telling because he was the point person on this. he was the guy who really struck the deal. and as we heard earlier in the day from democrats like tom harkin who i talked to, actually trying to get joe biden on the phone and having trouble this morning. i'm assuming he's done that since then. but other democrats on the progressive side, the liberal side, who have not been happy with their leadership, that they have given on taxes and other things. that's why we're going to wait and see what happens in the meeting. the fact they're having the meeting is a good sign because jessica yellin reported from the white house earlier today that biden would probably only come up if they felt comfortable and confident they can get something

through. >> joe biden is the vice president of the united states, but he's also the president of the united states senate. tim carney, let's get your reaction. what do you think is going on? >> well, i think the fact is that he's trying to appease some of the liberal senators who are upset because what roland just said is wrong. obama didn't do what he promised on the campaign and he did give in. he promised he was going to hike taxes on all income over $250,000. this deal hikes taxes on incomes over $450,000. i don't think it's a good deal but it's better than $250,000. they wanted a bigger hike in the estate tax, the inheritance tax, they're not getting that, and the spending fight is pushed off until later. largely, this is a win for republicans and there are some liberals in the democratic senate caucus who want to rebel and biden is coming in to try to calm them down. >> hold on for a second. jessica yellin is at the white

house. she's getting more information as well. what are you learning? >> hi, wolf. it's my understanding there is a deal among the principles in this negotiation. and they have reached their fundamental agreement. all that's left now is to get the democratic caucus briefed on it and informed about the particulars. they won't formally announce that there is a deal until they have briefed the democratic caucus and let them know exactly what's in it. my understanding is that the vice president is not yet headed up there just at this moment, but he's heading there shortly, any moment. and will once he's in the room and talking to them, after that happ happens, they will be able to announce that deal. so this has come together just at the very last moment, as president obama predicted. everything takes until the very last minute in this town.

and this did not fail. there are many hurdles left to overcome, and i reported earlier that among those hurdles are criticisms from progressive organizations, organizations allied with the democratic basis that says that democrats are giving up their leverage by doing this and they should wait to go over the fiscal cliff. we'll see if there are aggressive objectives by members of the democratic caucus. but as dana has been reporting throughout the day, it was senate democrats who held out for hours tonight to get what they wanted in this deal. so in the end, they negotiated away from what some of the republicans wanted. democrats got more of what they want, it sounds like. we'll see how it goes when vice president biden, a real veteran of the senate, heads up there to sell it to them any minute now, wolf. >> let's see what happens. we'll see if some point later tonight, who knows, the president might show up in the briefing room with a statement as well. roland, what do you think about this? because as you know, roland, a lot of progressive or liberal

democrats are disappointed the president has made some of these pretty far reaching concessions. >> you know, i would tell those people to seriously get a grip. i will say the same thing to conservatives who are complaining about the deal. this is when you know you have a deal that can get passed. when you have liberals and progressives and you have conservatives who are both ticked off. look, our colleague, erick erickson is out there telling senate republicans, don't accept this deal. the bottom line is you have to have some level of compromise. democrats were not going to get everything they wanted. republicans were not going to get everything they wanted. speaker boehner had to pull a deal off the table, saying here's a million bucks. come on, you can't satisfy everybody. >> roland martin, thanks very much. tim carney, thanks very much. we'll continue to follow what's going on. you know the president has a little bit of a problem with liberal democrats when robert reich, the former labor secretary in the clinton

administration says this is not a good deal, not something he could support. we'll be back with the latest news on the deal, apparently close to being reached. the vice president of the united states heading over to meet with the senators. stay with us. prothis is flo.ims. i need you. i feel so alone. but you're not alone. i knew you'd come. like i could stay away. you know i can't do this without you. you'll never have to. you're always there for me. shh! i'll get you a rental car. i could also use an umbrella. fall in love with progressive's claims service.

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